IMF’s Annual Meetings Explore The Future of Work

The looming questions that drive discussion around the future of work and its evolution are both significant in number and import: will technological advancements halve employment opportunities? How will informally employed workers organize themselves to advocate for social safety nets that are respected across governments globally? What policies do we enact now to incentivize a restructuring of the educational paradigm quickly enough to prepare workers for a “micro-entrepreneurial career” alongside machines? These were only a few of the topics considered during IMF’s New Economy Forum on the Future of Work moderated by IMF Managing Director Christine Lagarde on October 11, 2017. A Time of Disruption The workforce principles and guidelines that were developed for a post-industrial era are largely irrelevant now. A third of the United States workforce is freelance and can’t rely on an employer for their social safety net. Episodic income means workers are not saving, and this employment uncertainty is a large driver of socio-economic mobility in terms of ability to invest or settle down. Our approach to workforce development has not adapted to accommodate these social trends, according to Gallup’s CEO Jim Clifton. In advanced economies, birth and marriage rates have sharply declined for decades, indicating that individuals are now looking to their jobs to generate meaning in their lives. Clifton suggests that a complete rethinking of how we approach employee recruitment and development is required to address this shift in priorities, or won’t effectively leverage the human capital that will be needed to address our most pressing issues: climate change, food shortages, and disease management, to list a few. Recent Gallup polling (which included five billion people) reveals that the top response worldwide to the question “What is your dream?” is to have a good job—30 hours a week with a good paycheck—and that 1.2 billion people worldwide have that. However, the dated assumption that that individuals stay in one job for their entire lives and aim to advance only within the confines of that limited role continues to guide our advanced education and development models. People need to feel like they are contributing to something greater than themselves, and feel that they are experiencing constant personal development. Clifton noted that many new approaches to business management attempt to tackle this issue by focusing on worker satisfaction (volleyball courts, free lunch, beer on tap, etc.), which still neglects to address the core of what younger generations feel they require—fulfillment and purpose. He stated: “One could argue that the idea of employee management doesn’t work anymore, and that it needs to be disrupted. Unless you can figure out how to do that, you’re going to miss a whole generation.” Andela’s CEO Jeremy Johnson and McKinsey Global Institute’s Chairman James Manyika both corroborated this assertion that our current models of training and development are outdated, especially, emphasized Manyika, given that technology currently has an incredibly brief 18-month life cycle. Workers no longer specialize in specific tasks for the span of their professional careers; they need to be infinitely more dynamic and have the tools available to progress and adapt. Johnson promoted the idea that high-capacity individuals who lack resources to overcome cost/time barriers to entry to technical career fields (e.g. software development and engineering) need help crossing the chasm from un- or underemployed to perpetually employed at a much higher wage scale. “Technology has driven progress, but productivity goes up only when human capital is successfully utilized”, according to Johnson. To achieve this, he emphasized you have to both train and place individuals, and then you must foster a continuous education model: “Have a complete picture of how you will move them across the chasm and keep them on the other side.”  The Missing Middle Productivity has gone up faster than wages have, which ILO Director-General for Policy Deborah Greenfield argues accounts for some of the global discontent. Workers are not getting their fair share of their efforts around the world, and Manyika thinks that technological advancements will only widen the socioeconomic divide. Mid-discussion, the question that weighed most heavily on those contemplating the future of work was addressed: will technological developments eradicate half of our workforce? The responses to this were surprisingly varied, but Manyika interjected that we can’t approach the question in this way, in that technology will have a greater impact on the value of empathetic work than it will on employment numbers in general. He mentioned that the narrative we have become comfortable with recently is that people won’t be replaced by machines, but we will work alongside them in new roles. The problem we must anticipate is that these hypothetical roles involve low-skilled labor, which will contribute to socioeconomic stratification. Greenfield agreed: young people today are working but still living in poverty, and this will not improve with technological advancement unless we can have deliberate discussions as a society about re-valuing empathetic career paths that have been classically considered low-mid wage positions which fall within the realm of “women’s work.” Especially as aging populations become an issue, and increasing rates of humanity crises that require human solutions multiply across the globe, finding ways to incentivize these positions becomes key. Uncertain Steps Forward Many systems need to be disrupted for meaningful progress to begin on many fronts, according to the panelists. Increased economic dynamism that allows for mobility where there currently is none involves tackling advanced education, wage setting mechanisms, social safety nets, employee protections that span borders, among many other factors. Sara Horowitz, founder of the Freelancer’s Union, lamented that our system continues to rely upon businesses themselves to determine what workers are given, on their own volition, and at their cost. Given that the global workforce is increasingly employed informally and episodically, it must be determined what systems will be accountable for providing the consistent professional development all career paths will require to remain dynamic. There are currently no policy incentives that encourage human capital development, which raises a host of questions: if not businesses’, should professional development be the responsibility of governments? Who will provide the training? Will people pay for it themselves? Though it is no small undertaking, Greenfield notes that the payoff for democratizing professional development and clearing access to highly technical training will be tremendous. Those who were previously burdened by barriers to access or traditional workforce stigmas will find much easier paths to professional success, and those who live in locations they would have previously had to leave to receive training will be able to remain in place and not only continue to contribute to their local economies, but tackle the problems that affect their home communities. So what’s the first step toward this lofty objective? According to Greenfield: “We have to put the playbook to the side.”